The Political Economy of Organized Crime: Violence, Political Competition and State Capacity

Paper Session

Sunday, Jan. 8, 2017 1:00 PM – 3:00 PM

Hyatt Regency Chicago, Crystal A
Hosted By: American Economic Association
  • Chair: Nicola Persico, Northwestern University

Social Conflict, Mafia, and State Capacity

Daron Acemoglu
,
Massachusetts Institute of Technology and NBER
Giuseppe De Feo
,
University of Strathclyde
Giacomo De Luca
,
University of York

Abstract

In this paper we study the rise of the Sicilian mafia at the end of the 19th century and its impact on medium-term and long-term economic outcomes, state capacity and political competition. The new hypothesis, which we develop and empirically substantiate, is that the mafia’s expansion was triggered as a response to the rise of socialist peasant movements starting in 1893. Following the very severe drought and agrarian crisis, the Fasci dei Lavoratori spread among Sicilian peasants, who organized to demand better working conditions and higher wages, and landowners turn to the mafia to counter these movements.<br /><br />
Exploiting differences in rainfall and drought intensity in 1893 as a source of variation across municipalities, we document a large response of peasant organizations and then the spread of the mafia within Sicily. The pattern we present is robust and does not exist when one focuses on rainfall or drought variation in other years, bolstering the case that this corresponds to a specific causal channel working only in the context of the expansion of these peasant organizations. <br /><br />
Using drought intensity in 1893 as an instrument for mafia in the early 1900s, we then investigate the impact of the mafia on educational outcomes in 1900s, long-term political competition and long-term economic outcomes. Our results indicate a sizable impact of the mafia on literacy in the medium-term, and very large impact on political competition, exhibiting itself by municipalities in which mayoral candidates run without opposition, and also long-term impacts on education and income extending into the decades following World War II.

Organized Crime, Violence and Politics

Alberto Alesina
,
Harvard University
Salvatore Piccolo
,
Catholic University of Milan
Paolo Pinotti
,
Bocconi University

Abstract

We investigate how criminal organizations strategically use violence to influence elections in order to get captured politicians elected. The model offers novel testable implications about the use of pre-electoral violence under different types of electoral systems and different degrees of electoral competition. We test these implications by exploiting data on homicide rates in Italy since 1887, comparing the extent of `electoral-violence cycles' between areas with a higher and lower presence of organized crime, under democratic and non-democratic regimes, proportional and majoritarian elections, and between contested and non-contested districts. We provide additional evidence on the influence of organized crime on politics using parliamentary speeches of politicians elected in Sicily during the period 1945-2013.

Mafia, Elections and Political Violence: Evidence from Italy

Gianmarco Daniele
,
University of Barcelona
Gemma Dipoppa
,
University of Pennsylvania

Abstract

Organized crime uses political violence to influence politics in a wide set of countries. This paper exploits a novel dataset of attacks directed towards Italian local politicians to study how (and why) criminal organizations use violence against them. We test two competing theories to predict the use of violence i) before elections, to affect the electoral outcome and ii) after elections, to influence politicians from the beginning of their term. We provide causal evidence in favor of the latter hypothesis. The probability of being a target of violence increases in the weeks right after an election in areas with a high presence of organized crime, especially when elections result in a change of local government.
Discussant(s)
Claudio Ferraz
,
PUC-Rio
Decio Coviello
,
HEC Montreal
Pascual Restrepo
,
Massachusetts Institute of Technology
JEL Classifications
  • D7 - Analysis of Collective Decision-Making
  • K4 - Legal Procedure, the Legal System, and Illegal Behavior